Indian equity benchmarks extended losses to a third straight session on Tuesday dragged by financial, IT and FMCG shares, as investors awaited the outcome of a key RBI meeting the next day.
The RBI’s Monetary Policy Committee is widely expected to announce a hike in the key lending rate following its first bi-monthly deliberations since May 4, when it surprised the Street with a 40-bps increase.
What do the charts suggest for Dalal Street now?
“The index is on the edge of breaking below crucial support at 16,400 but minor buying is still emerging from the lows,” he said.
A make-or-break level: 16,371
Volatility is likely to persist and a clear direction in the 50-scrip gauge may only emerge after the RBI policy outcome, said Kunal Shah, Senior Technical and Derivatives Analyst at LKP Securities.
“The Nifty Bank is stuck in a broad range between 34,500 and 36,000, and a break on either side will lead to further trending action. The undertone remains weak as long as it stays below 36,000, where the highest open interest is built up on the call side,” he said.
Here are key things to know about the market ahead of the June 8 session:
Singapore Exchange (SGX) Nifty futures — an early indicator of the Nifty index — rose as much as 85 points or 0.5 percent to 16,509.5 early on Wednesday, suggesting a positive opening ahead on Dalal Street.
Global markets
Equities in other Asian markets made a comeback on Wednesday tracking overnight strength on Wall Street. MSCI’s broadest index of Asia Pacific shares outside Japan was up 1.2 percent at the last count.
Japan’s Nikkei 225 was up one percent, China’s Shanghai Composite 0.5 percent and Hong Kong’s Hang Seng 1.7 percent.
S&P 500 futures edged down 0.1 percent. On Tuesday, the three main Wall Street indices made a late recovery led by tech and energy shares. The S&P 500 rose one percent, the Dow Jones 0.8 percent and the Nasdaq Composite 0.9 percent.
What to expect on Dalal Street
HDFC Securities’ Shetti believes the Nifty’s short-term trend remains negative.
“One may expect the index to witness a sustainable bounce from the 16,300-16,250 levels in the next 1-2 sessions,” he said.
Important levels to track
Both the Nifty50 and the Nifty Bank are around five percent below their long-term simple moving averages.
| Period (No. of sessions) | Simple moving average | |
| Nifty50 | Nifty Bank | |
| 5 | 16,544.2 | 35,363.1 |
| 10 | 16,451.5 | 35,317.8 |
| 20 | 16,251.5 | 34,635.9 |
| 50 | 16,840.9 | 35,705.9 |
| 100 | 17,025.5 | 36,339.2 |
| 200 | 17,268.7 | 36,832.2 |
Mohit Nigam, Head-PMS at Hem Securities, identified the following resistance and support levels:
| Index | Support | Resistance |
| Nifty50 | 16,350 | 16,600 |
| Nifty Bank | 34,700 | 35,500 |
FII/DII activity
Call/put open interest
The maximum call open interest is accumulated at the strike price of 17,000, with 1.6 lakh contracts, and the next highest at 16,800, with 1.2 lakh, according to exchange data. On the other hand, the maximum put open interest is at 16,000, with almost 99,000 contracts, and 15,800, with more than 65,000.
This suggests immediate resistance at 16,800 before a major hurdle at 17,000, and immediate support only at 16,000.
Long build-up
Here are five stocks that saw an increase in open interest as well as price:
| Stock | Current OI | CMP | Price change | OI change |
| ONGC | 41,699,350 | 161.15 | 4.47% | 32.92% |
| HAL | 1,819,250 | 1,902.10 | 0.32% | 17.91% |
| COALINDIA | 27,757,800 | 197.1 | 0.72% | 10.32% |
| TVSMOTOR | 7,597,800 | 738.4 | 1.37% | 8.79% |
| ATUL | 95,700 | 7,981 | 0.29% | 7.84% |
Long unwinding
| Stock | Current OI | CMP | Price change | OI change |
| UBL | 1,065,400 | 1,495 | -2.11% | -2.99% |
| AUBANK | 3,002,500 | 1,268.50 | -0.15% | -2.53% |
| COROMANDEL | 1,848,125 | 938.55 | -1.09% | -2.00% |
| HINDCOPPER | 11,902,400 | 104.1 | -2.53% | -1.95% |
| IPCALAB | 1,009,350 | 864 | -0.27% | -1.92% |
(Decrease in open interest as well as price)
Short covering
| Stock | Current OI | CMP | Price change | OI change |
| HONAUT | 13,650 | 32,601.35 | 4.69% | -5.05% |
| LUPIN | 8,901,200 | 611.6 | 0.55% | -1.77% |
| INDHOTEL | 20,697,212 | 231.55 | 1.25% | -0.72% |
| BHARATFORG | 6,843,750 | 654.8 | 0.53% | -0.69% |
| RECLTD | 27,288,000 | 116.5 | 0.39% | -0.31% |
(Increase in price and decrease in open interest)
Short build-up
| Stock | Current OI | CMP | Price change | OI change |
| DALBHARAT | 1,161,000 | 1,240 | -3.74% | 23.58% |
| GUJGASLTD | 1,955,000 | 523.25 | -5.09% | 21.16% |
| ACC | 2,858,500 | 2,143.35 | -0.18% | 13.49% |
| DELTACORP | 15,541,100 | 198.2 | -2.70% | 12.76% |
| NAM-INDIA | 2,889,600 | 267.5 | -3.45% | 11.96% |
(Decrease in price and increase in open interest)
52-week highs
Three stocks on the BSE 500 — the broadest index on the bourse — touched the milestone: Oil India, Mangalore Refinery and Hindustan Aeronautics.
52-week lows
A total of 18 scrips hit 52-week lows:
| AARTIIND | GRASIM | RAMCOCEM |
| AUROPHARMA | ICICIGI | SHREECEM |
| BIRLACORPN | JKCEMENT | TASTYBIT |
| CSBBANK | JUSTDIAL | TCNSBRANDS |
| DALBHARAT | LUXIND | ULTRACEMCO |
| GMM | RAJESHEXPO | VAKRANGEE |
Fear gauge
The India VIX — known in market parlance as the fear index — rose 1.1 percent to 20.4 on Tuesday, after surging as much as 4.3 percent during the session.
First Published: IST
